Steam is used for the distribution of district heating for building heating systems and industrial heating processes.

The advantage of the application of steam is that it can transfer large amounts of energy, as the energy released during phase transition can be utilised. This means that large amounts of energy per unit of mass can be transported compared with other substances. For example, 125 kJ/kg of water can be transported with a cooling of 30 K, whereas 1 kg of steam at 100 °C contains approx. 2250 kJ/kg.

Using steam for heat distribution also allows the cooling of condensate to be utilised. The drawback of using steam for heat distribution is that, due to the high temperatures, relatively large amounts of heat is dissipated through the distributing pipes. Some condensate in the supply pipes will therefore remain unused.

Furthermore, larger distribution pipes are required, as water has a greater volume in gas form than it does as a liquid. Finally, consumers require a more complex heat exchanger system, in order to convert the steam energy into a liquid-bearing form. Overall, heat distribution using steam is not particularly advantageous, and therefore exists only in older systems.

Steam is used in industrial processes where rapid heating is required, e.g. disinfection processes. When using steam, the large amount of energy released during phase transition causes the water temperature to rise extremely quickly. A company utilising steam-based heat distribution would typically operate their own steam generator and boiler.